Can FAANG employees be great startup founders?
Rahul Pandey had a great engineering job at Meta.
But after four years of working there, he decided to quit and start his own company: Taro, a private software engineer community focused on career growth.
Rahul thought his big-tech experience would serve him well in his new venture. And in some ways, it did. But he was also wildly unprepared to build something from scratch.
Going from zero → one is an entirely different process than testing features for 3 billion users.
Last week, Rahul published a fantastic interview with Eric Bahn, one of the GPs of Hustle Fund, on what it was like to go from big tech to startup life.
Today’s issue of TFP summarizes the two biggest takeaways:
- If you’re a founder looking to hire from a large tech company, here’s what Rahul and Eric recommend looking for in early-stage employees.
- If you’re a FAANG employee wanting to start a biz, here's how to make the most out of your transition.
The reality of big-tech to startup life
As an employee at a company like Meta or Google, you get a lot of perks.
Access to intelligent people. A generous and consistent paycheck. Free food, free drinks, free massages. 24-hour ice cream parlors. Onsite dentists.
The ability to test ideas on millions of users. Learning important mental models on scaling businesses. And 100+ other things.
But these benefits don’t prepare you for life as a new founder.
Because this is what starting a company actually looks like:
You’re in a garage. It’s 59 degrees F. You’re by yourself.
There’s no existing infrastructure. You don’t have any customers. You don’t have any distribution. You don’t have product market fit. You probably don’t even have a minimum viable product yet.
The beginning of startup life can suck, actually.
But there are thousands of hustlers (like you) who choose to do it anyway.
So if you’re working at a big company now but you wanna start something new, here’s our advice.
The transition from big tech to startup
Three things. Let's go:
1. Build relationships outside of your expertise
FAANG employees often stick to their field of expertise and ignore the rest of the world. But this is a huge missed opportunity to learn from others.
Engineers should meet marketers, lawyers, customer success, and salespeople. And vice versa!
The best way to spend the remaining time at your company is to invite people for coffee or lunch. Then ask:
- What do you do in your current job?
- What is your past work experience?
- What are your future career goals?
You get a better understanding of how a business works as a whole.
Plus this may be an organic way to meet future co-founders, collaborators, and even early employees for your next company.
2. Dip your toes in the startup ecosystem
There are opportunities to build your career at a big company AND work with startups.
You can start a side hustle on the weekend. Or advise startups. Or lend your skills to contribute to a new project.
So just because you haven’t made the leap yet doesn’t mean you can’t get involved.
3. Learn how to talk to people (better)
Reality check: there’s very little engineering in the early days of a startup.
Most of the job involves talking to potential customers, sending cold emails, recruiting new employees, selling a product that doesn’t exist yet, and networking with investors.
Sometimes you’ll need to walk on the street, physically knock on doors, and convince small business owners to use your product.
And it’s really difficult to do things like this unless you’ve developed great mental models on sales and communication.
Employees rarely flex these muscles while working at a big tech company. Start practicing these skills now so you can use them when you branch out on your own.
Tips for founders hiring from big-tech
Three tips. Let's go.
1. Be selective on your first full-time hires
Your first full-time hire might be the most important hiring decision that you'll make.
If they’re coming from a big-tech company like Google, ask questions to see if they’ll be comfortable with the not-so-glamorous life of a startup.
Eric is not convinced that a VP of engineering could easily transition into this kind of environment.
So when you build your recruiting pipeline, filter for people who are hungry to work in early-stage startups.
2. Look for hustle
Hustle Fund defines hustle as “Great execution meeting high velocity”. So basically – do things well, and do them quickly.As the founder of a startup, you need your early employees to move fast, be self-sufficient, and solve problems..
3. Find a win-win compensation
At this stage, you may not have the budget to hire someone at market rate.
This is why founders use equity: to entice talented people to join their team. But how much equity should you give?
Believe it or not, there are no compensation norms for early-stage employees.
Our GPs have seen everything from giving early employees no equity to giving employee #1s near-founder level equity.
So it’s helpful to think about equity as a counterbalance to the risk of your company.
If employee #1 is sacrificing a lot to join your super early-stage startup, equity balances their risk.
If your company is in a great position and offers a competitive comp package, then it's more like a "regular” job.
By the way...
If you’re an engineer interested in a private community focused on career growth, check out Taro. They help engineers succeed in the job (instead of switching jobs) by learning from the best engineering leaders out there. See more here.